- U.S. manufacturing shrank first time in six months in August
- Strong U.K., Chinese factory data had earlier boosted shares
An unexpected contraction in American manufacturing took its toll on European equities, putting a damper on earlier optimism that global economic growth is gaining momentum.
The Stoxx Europe 600 Index lost almost all of an advance of as much as 1 percent, after the U.S. data highlighted slumping orders and production. That outweighed earlier reports showing U.K. factory activity reached a 10-month high and a manufacturing gauge in China unexpectedly rose. Health-care shares posted their biggest two-day slump since June, while energy stocks followed oil prices lower.
European equities have failed to keep momentum as the rebound that followed the fallout of the U.K. vote to leave the European Union stalled in recent weeks. The volume of Stoxx 600 shares changing hands was about 36 percent greater than the 30-day average on Thursday, with the gauge up less than 0.1 percent.
“Those numbers out of the U.S. really flipped sentiment around,” said Neil Wilson, a markets analyst at ETX Capital in London. “It’s at odds with what we got elsewhere in the world earlier today. The market is just so sensitive to any clues about the global economy right now, that it seems to move on each single piece of data. The direction is really hard to pin down.”
Banks, the industry group that has suffered the most this year, have rallied 4.4 percent in the past three days. Deutsche Bank AG Chief Executive Officer John Cryan called for more consolidation among the region’s lenders struggling to shore up profitability, after his own firm held talks with Commerzbank AG in August about a possible deal.
Bankia SA helped push Spain’s IBEX 35 Index up 0.5 percent -- among the biggest gains in western Europe. That’s even as the country has been mired in political turmoil, with caretaker Prime Minister Mariano Rajoy losing a confidence vote in the parliament on Wednesday. The chamber will vote again on Friday evening.
Among stocks moving on corporate news, Pernod Ricard SA advanced 2.3 percent after forecasting profit growth for the current fiscal year. Eiffage SA climbed 1 percent after the French construction company said profitability improved at its contracting and concessions divisions in the first half of the year. Elekta AB, a Swedish maker of medical devices, gained 1.5 percent after posting better-than-expected quarterly earnings.
Gas Natural SDG SA added 3.1 percent as people familiar with the matter said Global Infrastructure Partners is in preliminary discussions to acquire a stake in the Spanish company. Ackermans & van Haaren NV rallied 6 percent after KBC Group NV recommended buying shares of the Belgian financial firm.
In a release last night, Stoxx Ltd. said it will add Adidas AG, Irish building-materials supplier CRH Plc and grocer Ahold to its benchmark Euro Stoxx 50 Index, with the changes effective as of on Sept. 19. Assicurazioni Generali SpA, UniCredit SpA, Carrefour SA will be removed.